Big Idea, Worm Poop and Angel Investors

Last night I caught a bit of The Big Idea with Donny Deutsch. I was on my laptop while watching the show and tried to take some notes. He talks fast and interrupts guests too much. I figured I could visit the show’s website and gather names and more info, but his website sucks! Yea, it’s pretty and flashy, but no information. Update your website Donny!

Worm Poop and Used Plastic Bottles are very profitable. Tom Szaky dropped out of Princeton 5 years ago to start the company. His first round of funding came from winning, or coming close to winning, a business plan competition.

TerraCycle had $461,000 in sales(2005), mostly in Canada, where the product was carried by Home Depot and Wal-Mart as well as other chains. With the decision by both retailers to roll it out in their U.S. stores this year, the company’s 2006 sales are expected to top $2.5 million.

2. I’m not sure who was interviewed last, but he was part of a big venture/angel network. Here are the 5 tips he gave for being ready to pitch to an Angel Investors and Venture Firms.

- Plan “A” Rarely Works; Have a plan B.

- If you don’t have an answer, don’t fake it.

- Its all about credibility.

- Valuations can be valueless.

- If you can’t sell, get a partner.

All this venture and angel investment talk is new to me. With Simulagent, we did take some funding from friends and the next step for us may be going for an angel round.

I’m not sure if I agree with/understand the first tip - “Plan A Rarely works; Have a plan B”. Is he saying to have a second business plan in your back pocket? or to be ready to change the pitch on the spot? Either way, if I do make a pitch I’ll have a solid plan and be able to adapt to the crowd or individual.

I like the second tip - If you don’t have an answer don’t fake it. I’ll be the first to admit that I don’t have all the answers. That’s the whole point of seeking more funding .. to pay the people who have the answers.

The third - It’s all about credibility - They talked about how it’s best to get introduced to an angel network or venture firm prior to the meeting by a trusted or respected source.

Valuations can be valueless. This tip was followed up by some arrogance from both Donny and “The Guy”. By valueless they mentioned how founders don’t want to give up more that 10% of a startup for 1mil in investment. I’m not really sure how valuations work, but I don’t think I would have a problem with this point.

If you can’t sell, get a partner. I like this one too. I’ve talked to a lot of people about my projects. Many of them have nothing but good things to say about them. Every once in a while we get some brutal honesty (which I thrive on) and always take suggestions for change into consideration. The ability to sell concepts and ideas to people is tough. I’m confident in my abilities to sell, and am loving learning.

If anyone wants to discuss our projects .. drop us a note or submit a comment.